I am a Senior Political Contributor at Forbes and the official 'token lefty,' as the title of the page suggests. However, writing from the 'left of center' should not be confused with writing for the left as I often annoy progressives just as much as I upset conservative thinkers. In addition to the pages of Forbes.com, you can find me every Saturday morning on your TV arguing with my more conservative colleagues on "Forbes on Fox" on the Fox News Network and at various other times during the week serving as a liberal talking head on other Fox News and Fox Business Network shows. I also serve as a Democratic strategist with Mercury Public Affairs.

Pulitzer Prize winning tax reporter, David Cay Johnston, has written a brilliant piece for tax.com exposing the truth about who really pays for the pension and benefits for public employees in Wisconsin.

Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to “contribute more” to their pension and health insurance plans. Accepting Gov. Walker’ s assertions as fact, and failing to check, creates the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers.

Simple. The pension plan is the direct result of deferred compensation- money that employees would have been paid as cash salary but choose, instead, to have placed in the state operated pension fund where the money can be professionally invested (at a lower cost of management) for the future.

Many of us are familiar with the concept of deferred compensation from reading about the latest multi-million dollar deal with some professional athlete. As a means of allowing their ball club to have enough money to operate, lowering their own tax obligations and for other benefits, ball players often defer payment of money they are to be paid to a later date. In the meantime, that money is invested for the ball player’s benefit and then paid over at the time and in the manner agreed to in the contract between the parties.

Does anyone believe that, in the case of the ball player, the deferred money belongs to the club owner rather than the ball player? Is the owner simply providing this money to the athlete as some sort of gift? Of course not. The money is salary to be paid to the ball player, deferred for receipt at a later date.

A review of the state’s collective bargaining agreements – many of which are available for review at the Wisconsin Office of State Employees web site - bears out that it is no different for state employees. The numbers are just lower.

Check out section 13 of the Wisconsin Association of State Prosecutors collective bargaining agreement – “For the duration of this Agreement, the Employer will contribute on behalf of the employee five percent (5%) of the employee’s earnings paid by the State. ”

Johnston goes on to point out that Governor Walker has gotten away with this false narrative because journalists have failed to look closely at how employee pension plans work and have simply accepted the Governor’s word for it. Because of this, those who wish the unions ill have been able to seize on that narrative to score points by running ads and spreading the word that state employees pay next to nothing for their pensions and that it is all a big taxpayer give-away.

If it is true that pension and benefit money is money that already belongs to state workers, you might ask why state employees would not just take the cash as direct compensation and do their own investing for their retirement through their own individual retirement plans.

Again, simple.

Mr. Johnston continues-

Expecting individuals to be experts at investing their retirement money in defined contribution plans — instead of pooling the money so professional investors can manage the money as is done in defined benefit plans — is not sound economics. The concept, at its most basic, is buying wholesale instead of retail. Wholesale is cheaper for the buyers. That is, it saves taxpayers money. The Wisconsin State Investment Board manages about $74.5 billion for an all-in cost of $224 million. That is a cost of about 30-cents per $100, which is good but not great. However it is far less than many defined contribution plans, where costs are often $1 or more per $100.”

If the Wisconsin governor and state legislature were to be honest, they would correctly frame this issue. They are not, in fact, asking state employees to make a larger contribution to their pension and benefits programs as that would not be possible- the employees are already paying 100% of the contributions.

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Giving a long series of criminally absurd tax holidays to the rich and the super rich and their corporations actually seems to have bankrupted American government on every level from the village on up. The main beneficiaries of government’s largesse are those monetary criminals who pay others to lobby for the tax breaks that have bankrupted America. Prosperity means a time when wages and employment seem very likely to increase for the foreseeable future. Possibly it was a very bad idea to begin importing basic auto parts like batteries and generators from an ultra-low wage state like China. Possibly it is a very bad idea to offshore the health insurance industry’s back office jobs to India — as Mitt Romney did when he was the ineffective governor of Massachusetts. Both of those practices generate huge profits for the shareholders — over the short term. Over the long term, because the people of America don’t have enough money in their paychecks, it is very bad for American prosperity. Cutting government jobs to the level now seen in the Obama administration is a huge mistake; private industry simply doesn’t function well in the modern age without a large component of government spending because government spending means jobs, jobs, jobs. Wake up and get used to it. There will be no adequate levels of prosperity in America until government employment levels return to the levels we saw in the late ’90s, which were fairly typical. Right now, slashing government’s payroll only benefits the Chinese and Indian workers. That’s a great way to spend government money …. NOT!!! Many people don’t understand that modern industry is so fantastically profitable because goods can be manufactured by low wage robots. Nor do they understand that every dollar paid out by the state to its employees recirculates in the economy between six and ten times before it finally lodges in a corporate bank account. That circulation of money produces prosperity.

OK….Dan….they work for the public. The public uses their services. The elected officials pay according to negotiated schedules. So do you want a lower pay scale? If you contracted with privately owned services do you think the service would be as good or realizing the stock holders would want a share of the money, would it be cheaper? Name one such service! Private hospitals versus community hospitals? Where would you go if you could not afford the essential services to find a cheaper service with comparable quality? Who would you hold responsible for failure to furnish services when you need them?

Amy, are taxpayers forced to pay for Jennifer Lopez’s cushy job? No, so you analogy is way off. Those benefits the public employees get are netoatiated with the Dem party, the gifts are given freely because those Dems don’t pay for it, the private sector does, and then the public unions vote for the Dems.. well duh… and the cycle continues. If the private sector, the ones who should also be at the negotiating table, decide to lower those benefits, because they want to spend for their own retirement, the public unions go insane, as was witnessed in Wisconsin.

Of course they are paid by the taxpayer. They work for the taxpayer. However, suggesting that their pension benefits are some sort of gift from the taxpayer is no more true than saying that their salary is a gift. Are you proposing that they should work for free? If you want to argue that public employees are over-paid, that is an argument you can make. You can also argue that these folks should get a pay cut because their employer is in tough circumstances.

But the attempt to muddy the picture by suggesting that they are receiving some ‘special’ benefit from the state at no cost to themselves is disingenuous to say the least.

Do you mind if I point out that you might be a bit conflicted on your feelings as they pertain to Wisconsin? I could be wrong, but your last two comments have been really off the mark where you are usually on point.

Can’t believe I just saw this article, but … Your basic premise is flawed, in my opinion. Perhaps I missed it, but I missed the part where you explain that public pensions ARE funded by taxpayers via the EMPLOYER contribution. I find it hard to believe that Wisconsin cities, counties, and school districts are not contributing to the pension fund on behalf of each employee. I (speaking as a municipal employee) would consider the employer contribution to be taxpayer-funded. I’m not saying it’s right or wrong, but the it is what it is….tax dollars.

I find it amazing that people who are constantly concerned about the poor beleaguered taxpayers who have to pay for public services like road construction and maintenance, public safety, public education, sanitation and clean water supply, etc. never seem to recognize that those public employees whom they pay also pay the exact same taxes that employees of the private sector pay. Cutting public employee pay and laying off public employees actually contributes to exacerbating government deficits because unemployed people and people working for less pay less taxes as well.

David, You can’t argue logic with zealots. It’s just wasted air. Every public employee works for taxpayers. The more money they make the more money taxpayers pay. Period. When they balk at having to contribute more to their health benefits they are asking their fellow taxpayers to pay for that privilege. No one really cared about that in the past because we respected public employees because they did necessary work to serve the public at a sacrifice supposedly, because they didn’t go into the private sector. (Though I don’t know how many public employees would last in the private sector, you actually have to do work there or you’ll be gone, not so with lots of public jobs, at least here in Chicago.) However, now that people get workers compensation payments for falling out of their chair at work while they’re asleep, thanks to their union, or when teachers repeatedly show up for work only to be sequestered into a room and not teach at all but still get paid, or when the average salary of a government employee exceeds the average salary of a working stiff who pays their salary, well taxpayers began to care. So when people started losing their jobs and they saw public employees and their unions fighting for more of their money, they took umbrage. Public employees should get paid based upon public tax receipts not some salary, or promised benefit. Your employers are not in the private sector where they actually make money. Every dollar you earn as a public employee comes from the blood, sweat and tears of taxpayers who pay for your service (as well as your own taxes). Get that…let that sink in. If taxpayers stopped paying public employees would not have a salary but they could have services since there is always the private sector. So I don’t get the argument here. There are good public employees and there are bad ones but to make like taxpayers do not pay for their benefits – indirectly albeit but still true – is disingenuous at best and scurrilous at worst.

Rick- thank you. In fact when trying to cut or freeze public employee pay, administrators always add up the benefits and the salary, and say, “look, this is your total compensation package and you are only looking at your pay check.” I’ve received a letter every year from the agency I work for, stating this very concept, “cheer-up, this total of salary and benefits is your actual pay”. I appreciate you going up against a very strong disinformation campaign.